Today, BaFin and Deutsche Bundesbank presented the results of the 2019 stress test of around 1,400 less-significant banks (LSIs) as well as the survey on the situation of earnings and resilience of German banks in the low interest rate environment. Raimund Röseler, BaFin Executive Director for Banking Supervision, said at the presentation of the stress test results in Frankfurt that the German institutions are „on average solidly capitalised even in the event of stress“.
MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:
„The significance of the LSI stress test is zero as long as only average results are presented. It is generally known that smaller institutions in Germany are solidly capitalised on average. The fact that the Bundesbank and BaFin follow the ECB in its secretiveness and only publish summary results does not increase confidence in the German banking market. Market transparency is extremely precious.
When it comes to transparency, the Bundesbank and BaFin should take the EU’s banking supervisory authority EBA as an example, which discloses detailed results for each bank tested. For a realistic picture of the German banking market, the Bundesbank and BaFin would at least have to provide information on the distribution of stress test results among the tested banks. The contagion effects on the financial system can be considerable, even if several medium-sized banks start to falter.
It is a good sign that even smaller banks have recognised the danger of climate risks for their balance sheets. But now the banks have to consistently account for climate risks in their risk management. It is reckless that almost half of the banks ignore climate risks for their business and make no effort to change this.“
Press release by Bundesbank and BaFin:
https://www.bundesbank.de/en/press/press-releases/results-of-the-2019-lsi-stress-test-807624